The King II report on corporate governance increases the responsibility of directors and officers to conduct their company affairs in a manner which respects the interests of all stakeholders, including shareholders.

The risks associated with being a director or officer are far reaching and the proliferation of new laws could make even routine management decisions nightmarish and trigger personal liability. Such legal proceedings affect not only the directors and officers personally, but impact financially on the company.

Risk management should be an integral part of every business and not just an exercise in meeting King II requirements. Putting an insurance policy in place with a reputable insurer is essential.

The cover, covers an insured wrongful acts including any actual or alleged breach of contract, breach of duty, breach of trust, act error, neglect, omission, misstatement, misleading statement, reach of warranty of authority, or any other act done or wrongful attempted.

This protection is restricted by limiting it to act done or wrongful attempted by the Directors individually or collectively in the discharge of their duties, solely in their capacity as directors and officers of the company.

The range of individuals who can be regarded as past or present directors or officers is wide so cover is provided for those individuals who are, were, or will be directors and officers of the parent, supervisory and subsidiary boards.

Provision is made for automatic inclusion of the newly acquired or created companies.

Main exclusions of this cover include dishonesty or fraud, questionable payments, copywrite, professional indemnity, inadequate insurance, pensions, illegal profits or gains, fines, product defects, failure to control pollution, injury, sickness and damage, known actions, damage to property, deliberate acts, as well as guarantees and warranties.

The policy therefore covers the following:

A wrongful act

Cover for those individuals who are were, or will be directors and officers of a company.

Provision is made for automatic inclusion of a newly acquired or created company.

Cover for the company itself for circumstances where the company reimburses the directors and officers through the Memorandum or Articles of Association.

Legal defence costs in defending an allegation are payable by the policy prior to the final resolution of the claim.